Posted by John Merchant on May 23, 2006 at 09:08:15:
Here’s the note you originally described: “With an unseasoned note and actual value at fifteen thousand…Asumin a not so glowing credit rating on buyer also…or six months seasoning”
So now he’s got excellent credit? And “actual” value is $18,000 per lot? And now the note has 6 months’ seasoning?..are you talking about same deal now?
Again, what would YOU pay for this note?
Am creating note in first position to sell - Posted by Ricky Towne
Posted by Ricky Towne on April 21, 2006 at 02:04:54:
Hi I am selling a river lot for twenty thousand, I’m trying to get top dollar. fast sale and still get some cash at the table. If I cary two ten thousand dollar notes for ten thousand at 8% with a seven year amort. on the first position note (15 yr. with balloon on second> With an unseasoned note and actual value at fifteen thousand; what kind of discount whould be normal on the first note.
Asumin a not so glowing credit rating on buyer also.
Thanks any offers or insight are appreciated Rj towne mrmudlet Atyahoo.com
Re: Am creating note - Posted by John Merchant
Posted by John Merchant on May 20, 2006 at 10:38:43:
Michael is right.
A good test is what would YOU pay for the same note.
I’ve learned to very leary of these “created for sale” notes as they’re usually pretty weak.
No money down, land collateral, etc. - Posted by Michael Morrongiello
Posted by Michael Morrongiello on April 22, 2006 at 17:51:56:
Ricky:
Let me make sure I (and others) get this right. You are selling a river front land lot that has an “Actual value at $15K…” for an inflated sales price of $20K to a buyer who is not puttting any cash to speak of down as a down payment and also has a “not so glowing credit” and you intend to finance this $20K sale by taking back (2) two Notes and Mortgages. There are not a whole lot of positives here don’t you think?
The repayment terms of the (2) two mortgages are:
A $10K 1st lien Mortgage @ 8% to be fully amortized over 84 months and payable $155.86 P & I monthly. This is the mortgage you would like to sell?
You will also carry a 2nd lien Mortgage Note for $10K to be amortized over 180 months @8% payable $95.57 P & I per month with a future balloon payment due.
With no track record of payments paid on EITHER of the seller carry back Notes, its doubtful an astute investor will invest more than between $6K to $7K cash for the purchase of the 1st lien Mortgage Note under these circumnstances. There is simply a tremendous amount of RISK associated with the unproven performance of how this borrower will do in making their payments.
My .02 cents…
Best to your success,
Michael Morrongiello
www.sunvestinc.com
Re: Am creating note - Posted by Ricky Towne
Posted by Ricky Towne on May 23, 2006 at 01:46:57:
If the actual value is around $18,000 (assesed 14,000) and the buyer has excellant credit : Whats the big risk. What if it’s on a contract for security. or six months of seasoning. I know you guys are going to break it down to a 18% or so yield so wheres the risk.